What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 241 added, 173 removed, 563 unchanged (42% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, 2023

September 30, 2023

December 31, 2022

9 unchanged sentences

Accrued liabilities

Short-term loan

Total current liabilities

8 unchanged sentences

200,000,000 shares authorized;

5,300,916 and 712,564 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

6,579,957 and 712,564 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and six months ended June 30, 2023 and 2022

For the three and nine months ended September 30, 2023 and 2022

(in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the three and six months ended June 30, 2023 and 2022

For the three and nine months ended September 30, 2023 and 2022

(in thousands, except share and per share data)

14 unchanged sentences

Issuance of common stock and warrants, net of offering costs

Issuance of common stock in connection with warrant exercise, net of offering costs

Issuance of common stock in connection with warrant exercise

Balance as of June 30, 2023

Stock-based compensation

Issuance of common stock in connection with warrant exercise

Balance as of September 30, 2023

Common Shares

12 unchanged sentences

Balance as of June 30, 2022

Stock-based compensation

Release of vested restricted common stock

Restricted stock awards cancelled

Issuance of warrants in connection with convertible promissory note

Balance as of September 30, 2022

Share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023, as discussed in Note 1.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2023 and 2022

For the nine months ended September 30, 2023 and 2022

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

16 unchanged sentences

Cash flows from financing activities:

Repayment of convertible note payable

Repayment of convertible note payable, net of issuance costs

Repayment of finance lease

1 unchanged sentence

Proceeds from exercise of warrants

Net cash provided by (used in) financing activities

Proceeds from issuance of short-term loan, net of issuance costs

Net cash provided by financing activities

Net decrease in cash and cash equivalents

5 unchanged sentences

Noncash Investing and Financing Activities:

Issuance of warrant liability in connection with February 2023 offering

Cashless exercise of warrants

Issuance of warrants in connection with February 2023 offering

Issuance of common stock in connection with convertible promissory note

1 unchanged sentence

Deferred offering costs reclassed from prepaid expenses

Accrual of legal fees for the short-term loan

Issuance of warrants in connection with convertible notes payable

Derivative liability recorded in connection with issuance of convertible notes payable

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies

5 unchanged sentences

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was granted 180 calendar days from the date of the Notice, or until December 20, 2022, to regain compliance with the Minimum Bid Price Requirement.

The Company’s Common Stock failed to regain compliance with the Minimum Bid Price Requirement as of December 20, 2022.

On December 19, 2022, the Company requested an extension of an additional 180 days in which to regain compliance with the Minimum Bid Price Requirement.

On December 21, 2022, the Company received notice from Nasdaq indicating that, while the Company has not regained compliance with the Minimum Bid Price Requirement, Staff has determined that the Company is eligible for an additional 180-day period, or until June 20, 2023, to regain compliance.

On December 21, 2022, Nasdaq granted the Company an additional 180-day period, or until June 20, 2023, to regain compliance with the Minimum Bid Price Requirement.

On January 18, 2023, the Company received notice (the “January 18 Letter”) that Nasdaq had determined that as of January 18, 2023, the Company’s securities had a closing bid price of $ 0.10 or less for ten consecutive trading days triggering application of Listing Rule 5810(c)(3)(A)(iii) which states in part:

2 unchanged sentences

On February 13, 2023, the Company received notice (the “February 13 Letter”) from Nasdaq that it had determined that the Company had cured its bid price deficiency and now complies with the Minimum Bid Price Requirement, as the closing bid price of the Company’s common stock was at least $ 1.00 per share for at least a minimum of 10 consecutive business days.

On March 20, 2023, the Staff orally notified us that we were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on Nasdaq to maintain a minimum of $ 2,500,000 in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”).

We reported stockholders’ equity (deficit) of ($ 1,996,000 ) in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and, as a result, did not satisfy the Stockholders’ Equity Requirement of $ 2,500,000 pursuant to Listing Rule 5550(b)(1).

As of March 31, 2023, we had stockholders’ equity of $ 7,763,000 and, accordingly, we believe that we had regained compliance with the Stockholders’ Equity Requirement.

On October 5, 2023, we received a written notification from Nasdaq notifying the Company that it was not in compliance with the Minimum Bid Price Requirement, because the closing bid price of the Company’s common stock was below $ 1.00 per share for the previous thirty (30) consecutive business days.

The notification has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq Capital Market under the ticker “WISA.” Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until April 2, 2024 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement.

If at any time during the Compliance Period, the bid price of the Common Stock closes at or above $ 1.00 per share for a minimum of ten ( 10 ) consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

As of March, we had stockholders’ equity of $ 7,763,000 and, accordingly, we believe that we have regained compliance with the Stockholders’ Equity Requirement.

As of June 30, 2023 we had Stockholders Equity of $ 5,861,000 and thus continue to meet the $ 2,500,000 requirement.

Reverse Stock Split

4 unchanged sentences

The common stock began trading on a split-adjusted basis at the start of trading on January 27, 2023.

Unless otherwise indicated, the information presented in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023 (the “Report”) gives effect to the Reverse Stock Split.

Unless otherwise indicated, the information presented in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 (the “Report”) gives effect to the Reverse Stock Split.

Basis of Presentation

11 unchanged sentences

Actual results could differ from those estimates.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Reclassification

1 unchanged sentence

These reclassifications did not result in any change in previously reported net loss, total assets or stockholders’ equity.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Concentration of Credit Risk and Other Risks and Uncertainties

5 unchanged sentences

The Company performs credit evaluations of its customers’ financial condition as necessary, and sometimes requires partial payment in advance of shipping.

As of June 30, 2023 and December 31, 2022, there was no allowance for doubtful accounts.

As of June 30, 2023, the Company had three customers accounting for 31 %, 29 %, and 17 % of accounts receivable.

As of September 30, 2023 and December 31, 2022, there was no allowance for doubtful accounts.

As of September 30, 2023, the Company had two customers accounting for 78 % and 11 % of accounts receivable.

As of December 31, 2022, the Company had two customers accounting for 62 % and 12 % of accounts receivable.

The Company had four customers accounting for 35 %, 13 %, 12 % and 11 % of its net revenue for the three months ended June 30, 2023.

The Company had two customers accounting for 29 % and 17 % of its net revenue for the six months ended June 30, 2023.

The Company had five customers accounting for 25 %, 12 %, 12 %, 12 % and 10 % of its net revenue for the three months ended June 30, 2022.

The Company had four customers accounting for 21 %, 16 %, 13 %, and 13 % of its net revenue for the six months ended June 30, 2022.

The Company had three customers accounting for 40 %, 28 % and 21 % of its net revenue for the three months ended September 30, 2023.

The Company had four customers accounting for 22 %, 17 %, 16 % and 15 % of its net revenue for the nine months ended September 30, 2023.

The Company had three customers accounting for 42 %, 16 %, and 12 % of its net revenue for the three months ended September 30, 2022.

The Company had three customers accounting for 20 %, 18 %, and 16 % of its net revenue for the nine months ended September 30, 2022.

The Company’s future results of operations involve a number of risks and uncertainties.

7 unchanged sentences

In the event that an offering is terminated, deferred offering costs will be expensed.

As of June 30, 2023 and December 31, 2022, the Company had capitalized $ 11,000 and $ 206,000 , respectively, of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet.

As of September 30, 2023 and December 31, 2022, the Company had capitalized $ 210,000 and $ 206,000 , respectively, of deferred offering costs in prepaid expenses and other current assets on the condensed consolidated balance sheet.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

13 unchanged sentences

The Company increases the net loss available to common stockholders by the amount of the deemed dividend.

For the three and six month periods ended June 30, 2023 and 2022, there were no deemed dividends.

For the three and nine month periods ended September 30, 2023 and 2022, there were no deemed dividends.

Product Warranty

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

15 unchanged sentences

If a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional before we transfer a good or service to the customer, those amounts are classified as contract liabilities which are included in other current liabilities when the payment is made or it is due, whichever is earlier.

During the three and six months ended June 30, 2023 and 2022, net revenue consisted of the following:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

During the three and nine months ended September 30, 2023 and 2022, net revenue consisted of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

Accounts receivables are recorded when the right to this consideration becomes unconditional.

We do not have any material contract assets as of June 30, 2023 and December 31, 2022.

(in thousands)

We do not have any material contract assets as of September 30, 2023 and December 31, 2022.

September 30,

Contract Liabilities

During the six months ended June 30, 2023, the Company recognized $ 44,000 of revenue that was included in the contract balances as of December 31, 2022.

During the nine months ended September 30, 2023, the Company recognized $ 44,000 of revenue that was included in the contract balances as of December 31, 2022.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

17 unchanged sentences

Advertising costs are charged to sales and marketing expenses as incurred.

Advertising costs for the three and six months ended June 30, 2023 were $ 118,000 and $ 273,000 , respectively.

Advertising costs for the three and six months ended June 30, 2022 were $ 231,000 and $ 404,000 , respectively.

Advertising costs for the three and nine months ended September 30, 2023 were $ 238,000 and $ 511,000 , respectively.

Advertising costs for the three and nine months ended September 30, 2022 were $ 300,000 and $ 704,000 , respectively.

Comprehensive Loss

1 unchanged sentence

Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss.

For the three and six months ended June 30, 2023 and 2022, the Company’s comprehensive loss is the same as its net loss.

For the three and nine months ended September 30, 2023 and 2022, the Company’s comprehensive loss is the same as its net loss.

Foreign Currency

5 unchanged sentences

Cumulative gains and losses from the translation of these operations’ financial statements are reported as a separate component of stockholders’ equity, while foreign currency transaction gains or losses, resulting from re-measuring local currency to the U.S.

dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and six months ended June 30, 2023 and 2022.

dollar are recorded in the condensed consolidated statement of operations in other income (expense), net and were not material for the three and nine months ended September 30, 2023 and 2022.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

3 unchanged sentences

For purposes of the diluted net loss per common share calculation, warrants exercisable for common stock, restricted stock units and shares issuable upon the conversion of convertible notes payable are considered to be potentially dilutive securities.

As of June 30, 2023, warrants to purchase 5,635,867 shares of common stock, 10,386 shares of restricted stock, 2,667 shares of restricted stock issued under an inducement grant and 5,466 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

As of June 30, 2022, warrants to purchase 44,407 shares of common stock, 15,792 shares of restricted stock and 62,906 shares of restricted stock issued under an inducement grant and 4,216 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

As of September 30, 2023, warrants to purchase 5,635,290 shares of common stock, 10,386 shares of restricted stock, 2,667 shares of restricted stock issued under an inducement grant and 5,466 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

As of September 30, 2022, warrants to purchase 67,028 shares of common stock, 16,775 shares of restricted stock and 2,906 shares of restricted stock issued under an inducement grant and 7,316 shares underlying restricted stock units have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

Recently Adopted Accounting Pronouncements.

17 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Going Concern

1 unchanged sentence

The Company has incurred net operating losses each year since inception.

As of June 30, 2023, the Company had cash and cash equivalents of $ 2.0 million and reported net cash used in operations of $ 9.1 million during the six months ended June 30, 2023.

As of September 30, 2023, the Company had cash and cash equivalents of $ 0.2 million and reported net cash used in operations of $ 12.1 million during the nine months ended September 30, 2023.

The Company expects operating losses to continue in the foreseeable future because of additional costs and expenses related to research and development activities, plans to expand its product portfolio, and increase its market share.

The Company’s ability to transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure.

The Company’s ability to attain profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure.

Based on current operating levels, the Company will need to raise additional funds by selling additional equity or incurring debt.

9 unchanged sentences

Inventories (in thousands):

September 30,

Raw materials

3 unchanged sentences

Property and equipment, net (in thousands):

September 30,

Machinery and equipment

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Balance Sheet Components, continued

Depreciation and amortization expense for the three months ended June 30, 2023 and 2022 was $ 32,000 and $ 31,000 , respectively.

Depreciation and amortization expense for the six months ended June 30, 2023 and 2022 was $ 65,000 and $ 60,000 , respectively.

The cost and accumulated depreciation of assets acquired under finance lease included in machinery and equipment in the above table as of June 30, 2023 were $ 72,000 and $ 68,000 respectively.

Depreciation and amortization expense for the three months ended September 30, 2023 and 2022 was $ 18,000 and $ 31,000 , respectively.

Depreciation and amortization expense for the nine months ended September 30, 2023 and 2022 was $ 82,000 and $ 91,000 , respectively.

The cost and accumulated depreciation of assets acquired under finance lease included in machinery and equipment in the above table as of September 30, 2023 were $ 72,000 and $ 72,000 respectively.

Accrued liabilities (in thousands):

September 30,

Accrued vacation

Accrued rebate

Accrued audit fees

Accrued compensation

Accrued rebate

Accrued legal fees

Accrued other

Customer advance

Accrued other

Accrued compensation

Accrued lease liability, current portion

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Borrowings, continued

15 unchanged sentences

The sum of the fair value of the warrants, the original issue discount for interest, issuance costs and the derivative liability for the embedded conversion feature for the Convertible Note were recorded as debt discounts totaling $ 2,509,000 to be amortized to interest expense over the respective term using the effective interest method.

During the three and six months ended June 30, 2023, the Company recognized $ 18,000 and $ 738,000 , respectively, of interest expense from the amortization of debt discounts.

In connection with the Private Placement, the Company entered into a placement agency agreement with Maxim (the “Placement Agency Agreement”), and agreed to issue to Maxim, a warrant to purchase up to an aggregate of 1,944 shares of Common Stock (the “Maxim Warrant”) at an exercise price of $ 99.70 per share, which is exercisable at any time on or after the six-month anniversary of the closing date of the Private Placement and will expire on the fifth ( 5 th ) anniversary of its date of issuance.

During the three and nine months ended September 30, 2023, the Company recognized $ 0 and $ 738,000 , respectively, of interest expense from the amortization of debt discounts related to the Convertible Note.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Borrowings, continued

Effective August 24, 2022, the Company and the Convertible Note Investor agreed to amend Section 3.1(b) of the Convertible Note to provide that the Conversion Price could not be lower than the Floor Price until stockholder approval has been obtained, after which stockholder approval the Floor Price may be reduced to no lower than $ 0.25 , subject to adjustment pursuant to the terms of the Convertible Note.

5 unchanged sentences

Convertible promissory note (in thousands):

September 30,

Convertible note payable

4 unchanged sentences

Subsequent changes in the fair value of these conversion features are measured at each reporting period and recognized in the consolidated statement of operations.

The Company recorded no balance of the derivative liability as of June 30, 2023 after the convertible note payoff in April 2023.

The Company recorded no balance of the derivative liability as of September 30, 2023 after the convertible note payoff in April 2023.

On November 28, 2022, the Company entered into a waiver of rights (the “Waiver”) with the Convertible Note Investor, pursuant to which the Convertible Note Investor agreed to waive certain prohibitions under the August Purchase Agreement with respect to the offering of units in December 2022 in exchange for the issuance by the Company, on the closing date of such offering, of an additional number of Series A warrants to purchase shares of Common Stock (the “Series A Warrants”) and an additional number of Series B warrants to purchase shares of Common Stock (the “Series B Warrants”) equal to the quotient obtained by dividing $ 750,000 by the public offering price for the units sold in the offering (such Warrants, the “Waiver Warrants”).

2 unchanged sentences

At a Special Meeting of Stockholders held on January 24, 2023, the Company received stockholder approval of the transactions contemplated by the August Purchase Agreement.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Borrowings, continued

On February 1, 2023, the holder of the Convertible Note converted approximately $ 708,000 , a portion of the outstanding principal amount into 67,500 shares of the Company’s common stock.

On April 11, 2023, the Company paid $ 1,656,744 to the holder of the Convertible Note which repaid the entirety of the outstanding balance and included the unpaid principal, interest through the payoff date, and a pre-payment premium of $ 276,000 which was recorded as a component of loss on debt extinguishment.

Short-Term Loan

On September 8, 2023, the Company entered into a Loan and Security Agreement with Meriwether Group Capital Hero Fund LP (“Meriwether”).

Pursuant to the Loan and Security Agreement, Meriwether provided the Company with a term loan in the principal amount of $ 650,000 that is scheduled to mature on November 7, 2023, subject to further extension (“Meriwether Loan”).

In addition, the Company has the right to request additional funding under the Meriwether Loan.

Borrowings under the Meriwether Loan will bear interest at a rate per annum equal to 18 %.

On the maturity date, subject to any extension, the Company is obligated to make a payment equal to all unpaid principal and accrued interest.

Pursuant to the Meriwether Loan, the Company shall pay to Meriwether a fully earned, non-refundable, origination fee in the amount of $ 50,000 .

The Company shall also pay to Meriwether a fully earned, non-refundable, exit fee in the amount of $ 50,000 due and payable on the maturity date.

The origination fee, the exit fee and the issuance costs associated with the Meriwether Loan were recorded as debt discounts totaling $ 113,000 to be amortized to interest expense over the respective term using the effective interest method.

During the three and nine months ended September 30, 2023, the Company recognized $ 41,000 , of interest expense from the amortization of debt discounts related to the Meriwether Loan.

The Meriwether Loan also provides that all present and future indebtedness and the obligations of the Company to Meriwether shall be secured by a first priority security interest in all real and personal property collateral of the Company.

The Meriwether Loan contains customary representations, warranties and affirmative and negative covenants.

In addition, the Meriwether Loan contains customary events of default that entitle Meriwether to cause the Company’s indebtedness under the Loan and Security Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the term loan.

Under the Meriwether Loan, an event of default will occur if, among other things, the Company fails to make payments under the Meriwether Loan, the Company breaches any of the covenants under the Meriwether Loan, a material adverse change occurs, the Company, or its assets, become subject to certain legal proceedings, such as bankruptcy proceedings.

Upon the occurrence and for the duration of an event of default, a default interest rate equal to 24.0 % per annum will apply to all obligations owed under the Meriwether Loan.

On October 10, 2023, Meriwether agreed to extend the maturity date of the Meriwether Loan to December 7, 2023.

See Note 11 - Subsequent Events.

Short-term loan (in thousands):

September 30,

Short-term loan

Debt discount

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Fair Value Measurements

8 unchanged sentences

The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 by level within the fair value hierarchy, are as follows:

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 by level within the fair value hierarchy, are as follows:

(in thousands)

June 30, 2023

September 30, 2023

Quoted prices

Derivative liability

Warrant liabilities

4 unchanged sentences

Warrant liabilities

There were no transfers between Level 1, 2 or 3 during the three and six months ended June 30, 2023 or June 30, 2022.

There were no transfers between Level 1, 2 or 3 during the three and nine months ended September 30, 2023 or September 30, 2022.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Fair Value Measurements, continued

Derivative Liability

As described previously in Note 4, the conversion provisions embedded in the Convertible Note require bifurcation and measurement at fair value as a derivative.

As described previously in Note 4, the conversion provisions embedded in the New Convertible Note require bifurcation and measurement at fair value as a derivative.

The fair value was calculated using a Monte Carlo simulation to create a distribution of potential market capitalizations and share prices for the Company on a weekly basis over the assumed period, given the various scenarios.

The average value of the Convertible Note was discounted to the valuation date to determine a calibrated discount rate so that the fair value of the Convertible Note was $ 3 million.

The value of the Convertible Note was compared with the value of a hypothetical note with no conversion rights in order to determine the fair value of the conversion feature.

The derivative liability was written off upon the repayment of the Convertible Note.

The average value of the New Convertible Note was discounted to the valuation date to determine a calibrated discount rate so that the fair value of the New Convertible Note was $ 3 million.

The value of the New Convertible Note was compared with the value of a hypothetical note with no conversion rights in order to determine the fair value of the conversion feature.

The derivative liability was written off upon the repayment of the New Convertible Note.

September 30,

(in thousands)

4 unchanged sentences

Warrant Liabilities

The following table includes a summary of changes in fair value of the Company’s warrant liabilities measured at fair value using significant unobservable inputs (Level 3) for the six months ended June 30, 2023 and 2022.

For June 30, 2023, the fair value of such warrants was determined using the Black-Scholes Model based on the following key inputs and assumptions:

For September 30, 2023, the fair value of such warrants was determined using the Black-Scholes Model based on the following key inputs and assumptions:

common stock price of $ 0.59 ;

3 unchanged sentences

risk-free interest rate of 4.6 % and expected life between 3.9 and 4.4 years.

September 30,

(in thousands)

1 unchanged sentence

Change in fair value

Cashless exercise of warrant liabilities

Exercise of warrant liabilities

Ending balance

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Stockholders’ Equity

5 unchanged sentences

(i) increase the annual share limit of Common Stock that may be issued in any single fiscal year only for the 2023 fiscal year under the LTIP from 8 % of the shares of Common Stock outstanding to 15 % of the shares of Common Stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP), and (ii) permit immediately quarterly calculations based on the number of shares of Common Stock outstanding as of the first trading day of each fiscal quarter, rather than solely as of the first trading day of the fiscal year.

As of June 30, 2023, up to 795,137 shares of common stock are available for participants under the LTIP.

For the three and six months ended June 30, 2023, 3,585 shares of restricted stock issued under the LTIP were released with an intrinsic value of approximately $ 5,000 .

For the three and six months ended June 30, 2022, 47 and 2,230 shares of restricted stock, respectively, issued under the LTIP, were released with an intrinsic value of approximately $ 30 and $ 2,570 , respectively.

A summary of activity related to restricted stock awards (excluding the deferred shares) for the six months ended June 30, 2023 is presented below:

As of September 30, 2023, up to 207,567 shares of common stock are available for participants under the LTIP.

For the three and nine months ended September 30, 2023, 3,585 shares of restricted stock issued under the LTIP were released with an intrinsic value of approximately $ 5,000 .

For the three and nine months ended September 30, 2022, 613 and 2,843 shares of restricted stock, respectively, issued under the LTIP, were released with an intrinsic value of approximately $ 37,000 and $ 294,000 , respectively.

A summary of activity related to restricted stock awards (excluding the deferred shares) for the nine months ended September 30, 2023 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2023

Non-vested as of June 30, 2023

As of June 30, 2023, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 1,405,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.6 years.

Non-vested as of September 30, 2023

As of September 30, 2023, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 1,947,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.0 years.

Inducement Grant

On September 13, 2021, the Company issued 3,100 shares of restricted common stock to Eric Almgren, the Company’s Chief Strategist, as an inducement grant (“September 2021 Inducement Grant”).

As of September 30, 2023, the unamortized compensation cost related to the unvested September 2021 Inducement Grant was approximately $ 249,000 which is being amortized on a straight-line basis over a period of approximately 1.0 years.

The Company recorded stock-based compensation of $ 191,000 , related to this grant for the nine months ended September 30, 2023.

As of September 30, 2023, 2,667 shares are unvested.

For the nine months ended September 30, 2023, 111 shares of restricted stock were released under the September 2021 Inducement Grant with an intrinsic value of less than $ 1,000 .

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Stockholders’ Equity , continued

2020 Stock Incentive Plan

A summary of activity related to restricted stock units under the Company’s 2020 Stock Incentive Plan for the six months ended June 30, 2023 is presented below:

A summary of activity related to restricted stock units under the Company’s 2020 Stock Incentive Plan for the nine months ended September 30, 2023 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2023

Non-vested as of June 30, 2023

As of June 30, 2023, the unamortized compensation costs related to the unvested restricted stock units was approximately $ 75,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 0.3 years.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Stockholders’ Equity , continued

For the three and six months ended June 30, 2023, 71 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 92.00 .

For the three and six months ended June 30, 2022, 12 and 68 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 4 and $ 74 , respectively.

Inducement Grant

On September 13, 2021, the Company issued 3,100 shares of restricted common stock to Eric Almgren, the Company’s Chief Strategist, as an inducement grant (the “September 2021 Inducement Grant”).

As of June 30, 2023, the unamortized compensation cost related to the unvested September 2021 Inducement Grant was approximately $ 313,000 which is being amortized on a straight-line basis over a period of approximately 1.2 years.

The Company recorded stock-based compensation of $ 127,000 , related to this grant for the six months ended June 30, 2023.

As of June 30, 2023, 2,667 shares are unvested.

For the six months ended June 30, 2023, 111 shares of restricted stock were released under the September 2021 Inducement Grant with an intrinsic value of less than $ 1,000 .

A summary of activity related to restricted stock units under the Company’s Technical Team Retention Plan of 2022 (the “2022 Plan”) for the six months ended June 30, 2023 is presented below:

Non-vested as of September 30, 2023

As of September 30, 2023, the unamortized compensation costs related to the unvested restricted stock units was approximately $ 14,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 0.5 years.

For the three and nine months ended September 30, 2023, 71 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 92.00 .

For the three and nine months ended September 30, 2022, 599 and 668 shares of restricted stock issued under the 2020 Stock Plan, were released with an intrinsic value of approximately $ 430 and $ 500 , respectively.

A summary of activity related to restricted stock units under the Company’s Technical Team Retention Plan of 2022 (the “2022 Plan”) for the nine months ended September 30, 2023 is presented below:

Weighted-Average

1 unchanged sentence

Non-vested as of January 1, 2023

Non-vested as of June 30, 2023

As of June 30, 2023, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 142,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 3.0 years.

For the three and six months ended June 30, 2023 and 2022, no shares of restricted stock issued under the 2022 Plan, were released.

Non-vested as of September 30, 2023

As of September 30, 2023, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 130,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.3 years.

For the three and nine months ended September 30, 2023 and 2022, no shares of restricted stock issued under the 2022 Plan were released.

February 2023 Offering

On January 31, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 201,544 shares of common stock and pre-funded warrants (the “February 2023 Pre-Funded Warrants”) to purchase up to 381,762 shares of common stock, at an exercise price of $ 0.0001 per share of common stock, and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 874,959 shares of common stock, at an exercise price of $ 10.49 per share of common stock (the “February 2023 Offering”).

In February and March of 2023, all of the February 2023 Pre-Funded Warrants were exercised for cash.

On February 3, 2023, the Company closed the February 2023 Offering, and received net proceeds of approximately $ 5.3 million after deducting placement agent fees and other offering expenses payable by the Company.

In February and March of 2023, all the February 2023 Pre-Funded Warrants were exercised for cash.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Stockholders’ Equity , continued

Also, in connection with the February 2023 Offering, on January 31, 2023, the Company entered into a placement agency agreement with Maxim, pursuant to which Maxim agreed to act as placement agent on a “best efforts” basis in connection with the offering and (ii) the Company agreed to pay Maxim an aggregate fee equal to 8.0 % of the gross proceeds raised in the offering.

8 unchanged sentences

Warrants for Shares of Common Stock

A summary of the warrant activity and related information for the six months ended June 30, 2023 and 2022 is provided as follows.

A summary of the warrant activity and related information for the nine months ended September 30, 2023 and 2022 is provided as follows.

In connection with February 2023 Offering, the Company issued Common Stock Purchase Warrants to investors to purchase up to 874,959 shares of the Company’s common stock, at an exercise price of $ 10.49 per share.

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Stockholders’ Equity , continued

13 unchanged sentences

risk-free interest rate of 3.46 % and expected life of 5 years.

During the three months ended June 30, 2023, 1,486,132 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 1,895,000 .

In addition, during the three months ended June 30, 2023, 17,143 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance 12,856 shares of common stock.

There were no exercises of warrants to purchase common stock in the three months ended June 30, 2022.

Warrant Inducement

During the three months ended September 30, 2023, 510,000 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 617,000 .

There were no exercises of warrants to purchase common stock in the three months ended September 30, 2022.

Warrant Inducement - May 2023

On May 15, 2023, the Company entered into warrant exercise inducement offer letters (the “May Inducement Letters”) with the holders of common stock purchase warrants exercisable for an aggregate of up to 1,486,132 shares of common stock at an exercise price of $ 1.41 per share issued on April 12, 2023 (the “April Warrants”).

5 unchanged sentences

The May Inducement Warrants are callable by the Company at a redemption price of $ 0.50 per Inducement Warrant, provided that the resale of the shares of common stock underlying the May Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

Information regarding warrants for common stock outstanding and exercisable as of June 30, 2023 is as follows:

Warrant Inducement - July 2023

On July 26, 2023, the Company entered into warrant exercise inducement offer letters (the “July Inducement Letters”) with holders of the May Inducement Warrants pursuant to which the Company agreed to issue new inducement warrants (the “July Inducement Warrants”) to purchase a number of shares of Common Stock equal to 100 % of the number of shares of Common Stock received upon exercise of the May Inducement Warrants during the period provided for in the July Inducement Letters, with such July Inducement Warrants to be issued on substantially the same terms as the May Inducement Warrants.

The holders exercised 510,000 of the May Inducement Warrants pursuant to certain of the July Inducement Letters, and the Company received net proceeds of approximately $ 617,000 from such exercises.

In exchange for the exercises of the May Inducement Warrants, the Company issued July Inducement Warrants exercisable for an aggregate of up to 510,000 shares of common stock at an exercise price of $ 1.29 per share.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Stockholders’ Equity, continued

Each July Inducement Warrant was immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

The exercise price of the July Inducement Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock.

The July Inducement Warrants are callable by the Company at a redemption price of $ 0.50 per July Inducement Warrant, provided that the resale of the shares of common stock underlying the July Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

Information regarding warrants for common stock outstanding and exercisable as of September 30, 2023 is as follows:

Weighted Average

1 unchanged sentence

Exercisable as of

June 30, 2023

September 30, 2023

$ 1.29 - $ 1.91

1 unchanged sentence

* Weighted average

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Stockholders’ Equity , continued

Information regarding warrants for common stock outstanding and exercisable as of December 31, 2022 is as follows:

10 unchanged sentences

Additionally, warrants to purchase 207 shares of common stock which are shown above with a price of $ 1,580.00 are pre-funded warrants under which the holder shall pay $ 20.00 per share to complete the exercise.

The Company recorded a provision for income taxes of $ 2,000 and $ 2,000 for the three and six months ended June 30, 2023, respectively, and $ 2,000 and $ 2,000 for the three and six months ended June 30, 2022, respectively.

The Company’s effective tax rate was ( 0.05 )% and ( 0.02 %) for the six months ended June 30, 2023 and 2022, respectively.

The difference between the effective tax rate and the federal statutory tax rate for the six months ended June 30, 2023 and 2022 primarily relates to the valuation allowance on the Company’s deferred tax assets.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

The Company recorded a provision for income taxes of $ 0 and $ 2,000 for the three and nine months ended September 30, 2023, respectively, and $ 0 and $ 2,000 for the three and nine months ended September 30, 2022, respectively.

The Company’s effective tax rate was ( 0.02 )% for the nine months ended September 30, 2023 and 2022.

The difference between the effective tax rate and the federal statutory tax rate for the nine months ended September 30, 2023 and 2022 primarily relates to the valuation allowance on the Company’s deferred tax assets.

For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes.

1 unchanged sentence

The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

As of June 30, 2023 and December 31, 2022, the Company retains a full valuation allowance on its deferred tax assets.

As of September 30, 2023 and December 31, 2022, the Company retains a full valuation allowance on its deferred tax assets.

The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods.

The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income.

The provision for income taxes for the three and six months ended June 30, 2023 and 2022 was calculated on a jurisdiction basis.

The provision for income taxes for the three and nine months ended September 30, 2023 and 2022 was calculated on a jurisdiction basis.

Commitments and Contingencies

3 unchanged sentences

The lease amendment was considered a lease modification and the Company adjusted its right-of-use asset and operating lease liabilities accordingly as shown in the table below.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Commitments and Contingencies, continued

Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date we take possession of the property.

5 unchanged sentences

we recognize lease expense for these leases on a straight-line basis over the lease term.

The following table reflects our lease assets and our lease liabilities at June 30, 2023 and December 31, 2022 (in thousands).

The following table reflects our lease assets and our lease liabilities at September 30, 2023 and December 31, 2022 (in thousands).

September 30,

Operating lease right-of-use assets

1 unchanged sentence

Operating lease liabilities, non-current

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Commitments and Contingencies, continued

Operating lease right-of-use assets are included in other assets.

2 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

Operating lease cost

1 unchanged sentence

Total lease cost

As of June 30, 2023, the maturity of operating lease liabilities was as follows:

As of September 30, 2023, the maturity of operating lease liabilities was as follows:

(in thousands)

8 unchanged sentences

Present value of capital lease obligations

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Commitments and Contingencies, continued

Lease Term and Discount Rate:

June 30, 2023

September 30, 2023

Weighted-average remaining lease term (in years)

3 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

Operating cash outflows from operating leases

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Commitments and Contingencies, continued

Finance Lease

1 unchanged sentence

The equipment under the lease is collateral for the agreement and is included within property and equipment, net on the condensed consolidated balance sheets.

Future minimum lease commitments for the finance lease as of June 30, 2023 are as follows (in thousands):

Payments due in:

Year ending December 31, 2023 (remaining 6 months)

Total minimum lease payments

Amounts representing interest

Present value of capital lease obligations

Other liabilities

Obligations under the finance lease are included in accrued liabilities on the condensed consolidated balance sheets.

The lease expired in August 2023.

Management Team Retention Bonus

3 unchanged sentences

The Retention Plan expired on June 30, 2023 unused, and no accruals were made.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

Commitments and Contingencies, continued

Contingencies

5 unchanged sentences

The Company’s management does not believe that any such matters, individually or in the aggregate, will have a materially adverse effect on the Company’s condensed consolidated financial statements.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Related Parties

2 unchanged sentences

Kristensen serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China, president of Platin Gate Aps, a company with focus on service-branding in lifestyle products as well as pro line products based in Denmark and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands.

For the three months ended June 30, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $ 24,000 and $ 108,000 , respectively, and made payments to the Company of approximately $ 189,000 and $ 0 , respectively.

For the three months ended June 30, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $ 21,000 and $ 2,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 794,000 and $ 492,000 , respectively.

For the six months ended June 30, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $ 48,000 and $ 191,000 , respectively, and made payments to the Company of approximately $ 189,000 and $ 0 , respectively.

For the six months ended June 30, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $ 59,000 and $ 459,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 1,053,000 and $ 790,000 , respectively.

At June 30, 2023 and 2022, the Company owed Hansong Technology approximately $ 350,000 and $ 459,000 , respectively.

At June 30, 2023 and 2022, Hansong Technology owed the Company approximately $ 29,000 and $ 191,000 , respectively.

As of June 30, 2023 and December 31, 2022, Mr.

For the three months ended September 30, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $ 20,000 and $ 146,000 , respectively, and made payments to the Company of approximately $ 0 and $ 191,000 , respectively.

For the three months ended September 30, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $ 24,000 and $ 908,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 50,000 and $ 516,000 , respectively.

For the nine months ended September 30, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $ 69,000 and $ 337,000 , respectively, and made payments to the Company of approximately $ 189,000 and $ 191,000 , respectively.

For the nine months ended September 30, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $ 83,000 and $ 1,367,000 , respectively, and the Company made payments to Hansong Technology of approximately $ 1,103,000 and $ 1,306,000 , respectively.

At September 30, 2023 and 2022, the Company owed Hansong Technology approximately $ 324,000 and $ 851,000 , respectively.

At September 30, 2023 and 2022, Hansong Technology owed the Company approximately $ 49,000 and $ 146,000 , respectively.

As of September 30, 2023 and December 31, 2022, Mr.

Kristensen owned less than 1.0 % of the outstanding shares of the Company’s common stock.

Howitt has served as a member of the Company’s board of directors since December 2021.

Since March 2004, Mr.

Howitt has served as the founder and CEO of Meriwether Group LLC (“MWG”), a strategic consulting firm that works with disruptive consumer brands by integrating their visions, developing growth strategies, scaling their brands, and increasing revenue in order to build enterprise value.

MWG, which is also majority-owned by Mr.

Howitt, owns a 25 % general partner interest in Meriwether Group Capital Hero Fund LP (“Meriwether”).

On September 8, 2023, the Company entered into a Loan and Security Agreement with Meriwether.

See Note 4 Short-Term Loan for additional information.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

Segment Information

2 unchanged sentences

Net revenue from customers is designated based on the geographic region to which the product is delivered.

Net revenue by geographic region for the three and six months ended June 30, 2023 and 2022 was as follows:

Net revenue by geographic region for the three and nine months ended September 30, 2023 and 2022 was as follows:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

(in thousands)

2 unchanged sentences

Subsequent Event

Warrant Inducement – July 2023

The holders exercised 510,000 of the May Inducement Warrants pursuant to certain of the July Inducement Letters, and the Company received aggregate gross proceeds of approximately $ 678,000 from such exercises.

The inducement offering period closed at 5:00 p.m.

EDT on August 8, 2023.

Each July Inducement Warrant was immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

October 2023 Public Offering

On October 17, 2023, the Company completed a public offering consisting of an aggregate of 87,000 units (each a “Unit” and collectively, the “Units”), with each Unit consisting of (A) one ( 1 ) share of the Company’s series B convertible preferred stock, par value $ 0.0001 per share (the “Series B Preferred Stock), and (B) two series B preferred stock purchase warrants (each, a “Preferred Warrant” and collectively, the “Preferred Warrants”), with each Preferred Warrant exercisable for one share of Series B Preferred Stock (the “Preferred Warrant Shares”), at the public offering price of $ 55.00 per Unit.

The Preferred Warrants are immediately exercisable, each with an exercise price of $ 55.00 and expire on October 17, 2025.

The offering price of $ 55.00 per Unit reflects the issuance of the Series B Preferred Stock with an original issue discount of 45 %.

The gross proceeds to the Company from the offering were approximately $ 4.8 million, prior to underwriting discounts, commissions, and offering expenses.

Subsequent to the pricing of the offering, the Company entered into letter agreements with certain holders of outstanding common stock purchase warrants, pursuant to which the Company agreed to purchase from the holders an aggregate of 1,674,414 warrants with an exercise price of $ 1.91 , 2,462,264 warrants with an exercise price of $ 1.33 and 510,000 warrants with an exercise price of $ 1.29 (collectively, the “Existing Warrants”), for $ 0.50 per Existing Warrant.

The Company used $ 2.3 million of the $ 4.8 million gross proceeds discussed above to repurchase the Existing Warrants on October 17, 2023, and expects to use the remainder of the proceeds from the offering for working capital and general corporate purposes and to potentially repay outstanding indebtedness.

WISA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30, 2023 and 2022

Subsequent Event, continued

Certificate of Designation of Series B Preferred Stock

On October 16, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware designating 375,000 shares of the Company’s authorized preferred stock as Series B Preferred Stock, with a liquidation preference of $ 100.00 per share, and further establishing the powers, preferences and rights of the shares of Series B Preferred Stock and the qualifications, limitations or restrictions thereof.

The Series B Preferred Stock does not have voting rights, except as required by Delaware law and other limited circumstances.

Dividends on the Series B Preferred Stock shall be paid in-kind (“PIK dividends”) in additional shares of Series B Preferred Stock based on the stated value of $ 100.00 per share at the dividend rate of 20.0 % per annum (the “Dividend Rate”).

The PIK dividends will be paid to holders of the Series B Preferred Stock of record at the close of business on the one-year anniversary of the closing of the offering (the “Dividend Record Date”).

PIK dividends on each share of Series B Preferred Stock shall be paid three business days after the Dividend Record Date in additional fully paid and nonassessable, registered shares of Series B Preferred Stock in a number equal to the quotient obtained by dividing (A) the product obtained by multiplying (i) the Dividend Rate and (ii) the stated value of $ 100.00 per share, by (B) $ 55.00 , the offering price per Unit.

The Series B Preferred Stock has a term of two (2) years and is convertible at the option of the holder at any time into shares of Common Stock at a conversion price of $ 0.4147 , which is subject to adjustment.

If any shares of Series B Preferred Stock are outstanding at the end of the two (2) year term, then the Company will promptly redeem all of such outstanding shares of Series B Preferred Stock on a pro rata basis among all of the holders of Series B Preferred Stock commencing on October 17, 2025, in cash at a price per share of Series B Preferred Stock equal to the sum of (x) 100 % of the stated value plus (y) all accrued and unpaid dividends and (z) all other amounts due in respect of the Series B Preferred Stock.

If, on October 17, 2025, the Company is unable to redeem such outstanding Series B Preferred Stock in cash due to prohibitions under Delaware law, then the Company shall, provided there is no prohibition under Delaware law, redeem the Series B Preferred Stock by paying to the holders the unpaid cash redemption payment in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock equal in number to the quotient obtained by dividing such unpaid amount by the closing price of the Common Stock on the Nasdaq Capital Market on October 17, 2025.

Short-Term Loan Extension

On October 10, 2023, Meriwether extended the maturity date of the Meriwether Loan to December 7, 2023 for a fee of $ 20,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements